Are we ready to embrace Cloud Computing?

It is safe to say that by now most of us have either heard or read about the Cloud Computing model, so as a quick overview, Cloud Computing is a model for the delivery of computing solution as a service than a product.  Looking at it from a utility perspective, companies would pay for metered consumption of IT services.   Cloud computing can be either private or public.  As the names may suggest, public clouds (e.g. Amazon Web Services, Apple iCloud, and Google applications) deliver IT services using shared infrastructure, where as with the private clouds, the client organization is fully responsible for setting up their infrastructure, maintaining and managing it. 

Organizations are continually looking to mitigate issues associated with high availability of their business process systems and other critical systems.  They typically achieve this by increasing their capital investments in IT (procurement of additional network hardware, virtualized network infrastructure, or a hybrid model), and hiring specialized IT staff to support their infrastructure.  Given the current state of the global economy, organizations are increasingly being pressured to cut cost, while increasing innovation and remaining competitive.  Cloud computing model provides an opportunity for organization to lowers IT barriers to driving innovation.  According to a research by McKinsey & Co., cloud computing can cost twice as much as in-house IT infrastructure, which works to the advantage of small and medium sized companies (2009, p. 19-27).  The reason being the small companies don't have the resources to develop internal  IT infrastructure so financially speaking it provides a decent one stop managed solution for them. On the flip side large organizations have the resources to setup their internal infrastructure  (private cloud or any mix of the computing models) and allocate costs associated with staffing and resources to divisons or business units within the organization.   Viability of cloud computing solution depends on cost transparency, security and compliance.   

 There are 3 Categories of Cloud Computing:

1. Infrastructure-as-a-Service (IaaS) – In this situation the client organization simply wants to take advantage of the infrastructure provided in the cloud, and they have internal IT expertise.
2. Platform-as-a-Service (PaaS) – Client organization can utilize the existing cloud-based platform to develop their own custom application (e.g. Java, .Net, etc)
3. Software-as-a-Service (SaaS) – Largest growing cloud market.  Suite of applications reside within the cloud.

Pros/Cons of adopting a cloud computing model

 Pros:

• Customers rent the use of technology instead of purchasing, shifting IT from a combination of capital and operating expense to an operating expense only.
• Vendors would be responsible for maintaining, backup, supporting the infrastructure
• Fast, flexible, scalable, efficient, inexpensive and ease of access

Cons:

• Public clouds may not provide the required security for all organizations
• Creation of private clouds on the other hand would provide a much more tailored solution to the organizations, but at a very high cost.
• There are some regulatory barriers to entry for public clouds
  • US Health Insurance Probability and Accountability Act, has specific and strict requirements for organizations handling personal health data.
  • European Union (EU) prohibits transfer of data to countries outside Europe without prior consent.
  • Reliability on the uptime of network
  • No standardized architectural model, so instead client organizations need to be aware of a set of approaches to adopting a cloud computing model.
  • Cost of process change

Some of you may have some interesting insight on this topic and to get you started, consider the following questions:

1. What is your experience working with a SaaS solution?
2. In your opinion what are some of the business implications on full adoption of cloud computing model?
3. How would you manage governance in a cloud computing scenario?

John Shayegan, MBA, PMP 

Communications Manager, CWCC PMI